Some brief savings tips to those of you saving for a property deposit for 2017/18
1) Set yourself a savings target
Start by working out the true cost of buying the property you desire.
Additional costs to bear in mind when saving for a deposit property include:
• Stamp duty
• Conveyance fees
• Mortgage product fees
• Mortgage adviser (if used)
• Removal hire
2) Calculate mortgage costs
After you have set your target, work out how the monthly repayment costs of a mortgage for your desired property (bear in mind possible increases in price) and try and save the equivalent on a monthly basis.
3) Set up a standing order
Set up a standing order to leave your account the same day as you get paid. Treat saving like a bill by setting up a regular payment and you'll soon get used to not having the extra cash in your bank account each month.
4) Use a budget spreadsheet
Make a yearly budget and review it on a monthly basis. Set out all income and expenditure and cut out any unnecessary expenditure. We have put together a Property Cohort Budget Template which you can download and use for free.
5) Don’t be scared to adjust.
Compare the monthly target from your savings spreadsheet to your current rate of savings. If you're not saving enough you can either:
- Increase how much you save by cutting monthly expenses.
- Adjust your saving goals, either by reducing the value of the property you want to buy less or by pushing back the target date for buying the property.
6) Save before you spend
This one is self-explanatory!
7) Fixed Rate Bonds
If you are early on in your saving journey Fixed rate bonds can be a great option. It pays a guaranteed amount of interest for a set length of time, however it is likely that you won’t be allowed to access your savings during the fixed term, so only invest money you can afford to lock away.
8) Help To Buy ISA
If you’re a first-time buyer, you could get up to £3,000 from the Government by saving with a Help to Buy ISA. (More information can be found on page 8 of our property guide. (www.propertycohort.co.uk)
9) Stop renting
Most people renting have very little spare money to save for a deposit. Think about whether you could survive without your own space for a short time.
Consider the following:
- Find somewhere cheaper to rent perhaps out of London
- Moving back home with parents
10) Do not dip into your savings
Only dip into your savings in case of an emergency.
PS. Dining at fancy restaurants, Holidays to Miami, designer clothes and new trainers are not emergencies!!
Bonus Tip: Don’t just say saving for a house is your priority, show it is!